The social responsibility of business is ... what again?

Thank you for this informative (for pedestrians like me) and timely post.

Well, I think the problem is pretty much summed up by the options you present at the end of the post. There aren't just those two binary choices on how to define what CEO's should do.

The board should set multiple specific goals for CEO's and then pay them based on their performance regarding those goals.

In the military, it works like this: the President says "Invade Iraq by March" the Generals say "Move these units to Kuwait by February", the Colonels say "train your men on these tasks", the Captains say "take over that town", and the Lieutenants say "secure that block".

That's grossly oversimplified, but basically, shouldn't the board set specific goals and time frames for the company with input from the CEO, who then gets judged and paid based on his accomplishment of those goals?

It requires a more activist board, but if the board is accountable to the stockholders, (who can fire the board if they don't like the goals) this, or something similar, seems like a better recipe for long term success and increased accountability all around.

I think that there's a lot that has been written on corporate governance, which is an outgrowth of Sarbanes-Oxley.

Robert A.G. Monks has been focused on shareholder rights for several years, too.

In my humble opinion, it's should be balanced, and focused on the success of all stakeholders(employees, suppliers,customers, community, and shareholders).

Jensen's long quest to align shareholders' and corporate executives' interests make interesting reading. I couldn't help noticing that both Friedman and Jensen overestimated the market's ability to regulate itself. How much of that was due to laissez faire dogma, I wonder. Also, has anyone looked at whether mutual funds through proxy votes can play a useful role in better aligning the interests of shareholders and executives?

The social responsibility of the corporation will never go far enough. It is a stance that does not get at the root of the problem.

Bill Gates writes in Time magazine that he wants big corporations to do more for the world's poor. He calls this "creative capitalism." Who could possibly object?

Most reasonable people wouldn't. However, I think most people would also realize that relying on a few altruistic creative capitalists to fix world poverty or any number of other grave social ills would be foolhardy. Our big problems really can't be fixed by the actions of a few socially conscious corporate presidents. It is almost like asking a few creative capitalist to fix a big crack in the dam with a box of band aids. There is nothing wrong with this modest step. However, such actions are just not going to do much good.

I will give Bill credit for this insight. If you really want to fix some of the big problems on the world agenda you need to start with looking at corporations. But not with the people who work for them or run them.

The REAL PROBLEM TO FIX: Corporate power. Corporations posing as a person.

You need to look at the very definition of whom and what a corporation is.

That's right. You heard me right. A corporation is a who. A corporation is treated just like you or me. An 1886 landmark Supreme Court decision elevated corporations to its current special legal status. In Santa Clara County v. Southern Pacific Railroad, the Court ruled that a private corporation was a person and as such, under the Constitution, was protected by the Bill of Rights. The consequences of that ruling were enormous. Today, corporations stand virtually unchallenged.
That's the main problem. Corporations don't act like reasonable people looking out for the greater good of society. They mainly focus on looking out for their narrow interests. Their enormous needs are often in direct opposition to the greater good of the country or the poor people of the world.
Corporate dominance of the public sphere and its growing presence in our private lives are increasingly viewed as simply the way things are--it's just business. When corporate power is challenged by public advocates and small grassroots efforts, they often find themselves up against the goliath of might, money and big media.
Of course, corporations couldn't overwhelm populace rule if they did not have the kind of resources they have at their disposal. You or I can call staff persons for Congress or the President about an issue, but the corporation can hire a bevy of lobbyists to be on Capital Hill full time. Or they can give so much money to a political party that their CEO or Chairman is invited to spend the night in one of the guest rooms at the White House.
Regular voter have often heard the campaign speech that the only way to make our government responsive to the needs of the citizens is through campaign finance and lobby reforms. It is still necessary to follow through on these things, but there is another tool that needs to be pursued.

THE REAL SOLUTION: Real Corporate Democracy. People ruling the corporations.

We need to cut off corporate power at its source.
We need to change the legal doctrines and laws which give corporations overwhelming advantage over poor people of the world, communities, and nature.
We must overturn the precedent that the corporations are treated as persons under the law. This one huge step will do more for the environment and the health and well being of all our planet's inhabitants than any other law or regulation.
The right to redefine the status of corporations still rests with us. It will be very difficult, but it is time to start educating and talking among ourselves about reclaiming peoples' rights back from the corporate thieves.

I want to give credit to Richard Grossman and Ronnie Cummins for these writings. I simply re-organized their words.

http://www.ratical.org/corporations/TCoB.html
http://www.organicconsumers.org/corpgov.html

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